Stalemate in the trade war between the USA and the EU

The EU has higher tariffs on American passenger cars. The USA, in turn, has higher import tariffs on trucks from Europe. But overall, it's a draw in the tariff battle between the EU and the USA, according to statistics from Sweden's trade authority, the National Board of Trade.

» Published: February 15 2025

Stalemate in the trade war between the USA and the EU
Photo: Evan Vucci/AP/TT

The USA has gigantic trade deficits with large parts of the world, meaning that imports are much higher than exports. This particularly applies to China, but also to the EU. This is one of several reasons behind the USA's President Donald Trump's tariffs against the world. He wants to make imports more expensive or hinder them to prioritize domestic production.

He has specifically pointed out the EU as "absolutely brutal" when it comes to trade with the USA. Exactly what he means by this is unclear.

Marginally different

When it comes to tariffs between continents, they are, before a potential trade war breaks out, largely the same on average. The EU has marginally higher tariffs against the USA than vice versa, although it is within the margin of error, according to trade strategist Per Altenberg at the Swedish Agency for Trade.

The EU's trade-weighted tariff average against the USA is 2.43 percent. The USA's import tariffs on goods from the EU, in turn, average 2.37 percent, according to Per Altenberg's calculations based on how it looked in 2022.

However, there are significant differences between different product groups. The EU has higher import tariffs on agricultural products and food, averaging eleven percent. The USA has five percent on the same product groups.

The same as against others

The EU also has higher tariffs on passenger cars, ten percent compared to the USA's 2.5 percent, while the USA has higher import tariffs on trucks than vice versa. Generally, the EU has lower tariffs than the USA on industrial goods, according to Per Altenberg.

The EU's tariff levels are the same against other parts of the world (where there are no free trade agreements), i.e., they are not higher against the USA than against other countries.

This is regulated by the WTO's rules (World Trade Organization).

The most important rule says that you should not have different rules against different countries. Therefore, we have the same tariffs against all countries, says Per Altenberg.

The USA has largely always had trade deficits with the world, and increasingly so. Just in December, the total trade deficit was 98 billion dollars, over one thousand billion kronor. That is, the import of goods was 98 billion dollars higher than exports.

Against the EU, the USA had a trade deficit of 170 billion dollars in goods during the entire year of 2023.

Service trade, on the other hand, shows a different pattern. Then, the EU had a deficit of 105 billion dollars against the USA.

Source: Bloomberg, Swedish Agency for Trade

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By TT - Translated and adapted by Sweden Herald

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